NACCO Materials Handling Group Berea, Ky.

Top Plant
2011
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All photos by Tim Webb Photography
NACCO manufactures lift trucks for Hyster and
or the past three years, manufacturing must
have seemed like a high-stakes poker game Yale, and the lift truck business is a good bellwether
to some people. It also seems the game for what’s going on in the rest of manufacturing.
has been played only two ways—fold, or That business improved as other manufacturing sectors began to perk up, and NACCO’s Berea facility
go all in.
There is a third way to play, of course. increased its workforce by 40% in 2011.
NACCO did more than just add bodies, however.
It takes a lot more work and a lot more patience, and
Understanding that a flexible workforce would
it won’t always yield positive results on every
allow the company to continue to grow
play, but it is a surer way to build your
and change, it also placed a big bet on
chips. You have to place your bets in
extensive worker training.
the right places, at the right moments.
Co-op and internship programs with
Manufacturers around the U.S.
Berea College and Eastern Kentucky
and around the world are succeeding
University give students a chance to
in manufacturing because they have
see what a career at NACCO can be
placed their bets on the right aspects of
like. That also has helped facilitate
their business. They cannot control
growth.
what other players have in their
2 0 11
Rather than just sit back and prohands. They played the cards they are
tect the chips it had, NACCO Materials Handealt and seized the opportunity to improve
dling Group placed its bets on its people, and grew
when it came along.
Our 2011 Top Plant winner, NACCO Materials as a result. At a time when some seem reluctant to
Handling Group of Berea, Ky., is an outstanding bet on manufacturing, NACCO Materials Handling
example of placing your bets in the right place at the Group is a great example of how it can be a winning
right time. NACCO bet on its people to help grow strategy.
– Bob Vavra, Content Manager
the organization.
, NACCO Materials Handling Group ,
Berea, Ky.
2 • December 2011
plant engineering
Hire and higher
Building a workforce helps NACCO Materials Handling Group
build profits—and world-class lift trucks.
By Jack Smith
plant engineering
December 2011 • 3
T
William Miller works on the hood and seat installation for a lift truck at the
NACCO Materials Handling group plant in Berea, Ky.
W
hile some businesses closed their doors during
what some economists described as “the worst
economic crisis since the Depression,” those
that remained faced immense challenges over
the past three years.
One manufacturer that not only survived
the recession but became stronger in the process is NACCO
Materials Handling Group Inc.’s (NMHG) Berea, Ky., plant,
the 2011 Plant Engineering Top Plant winner. NMHG designs,
engineers, manufactures, sells, and services a comprehensive
line of lift trucks and aftermarket parts marketed globally under
the Hyster and Yale brands.
“It’s a great honor to win the Top Plant award,” said Tim
White, plant manager at NMHG’s Berea plant, who gives the
credit to the workforce at the plant. “I would put this workforce
up against any workforce, anywhere. We’ve weathered a very
rough storm. We were lockstep with our workforce going through
it. It wasn’t always good news, but we came out of it and we’re
stronger because of it and we’re seeing results.”
John Gardiner, vice president, Americas Manufacturing at NACCO Materials Handling Group,
Inc., understands what NMHG can gain from
looking at where it is and where it needs to go
on its continuous improvement journey. “I
think the Berea team needs to reflect on what
they have achieved and celebrate this mile
marker and energize themselves for the future,”
Gardiner said.
Although the recession was rough for many
manufacturers, NMHG took advantage of the
opportunity to get set for the recovery. “We used the slow time
to continue to drive improvement,” said Gardiner. “Those who
are ready when (the economy) comes back will be the winners.”
And winners they are.
Putting people back to work
Nearly every manufacturer felt the impact of the recession,
which forced most companies to make production and workforce
cuts. The Berea plant reduced its production schedule from two
4 • December 2011
plant engineering
Neil Simpson adds a part to the drive train assembly at NMHG. As
the economy improved, the company gradually brought back workers and expanded training.
shifts to one and experienced multiple workforce reductions,
according to White.
But NMHG positioned itself to respond to the
economic rebound. During the sluggish economy, the company
explored its options for the future. “When the recession
hit, we started making plans for the recovery,” White
said.
As the economy started to recover, NMHG
saw increasing demand for its products—enough
demand to justify rebuilding its workforce. The
number of team members at the Berea plant
increased from 502 in 2009 to 722 in 2010—more
than 30%.
Hiring was gradual. “We looked for market
stability,” said White. “We were conservative with
bringing people on. As we saw stability, we brought people
back to work.”
White estimates that the NMHG facility in Berea has slightly
more team members now than before the recession. Within
the past year, the plant also resumed second-shift operations.
“We called back some of the people who had worked for us
previously,” said Steve Lawson, human resources manager at the
Berea plant. “And we got a vast majority of them back—even
though some were working at other places. Our work culture
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Christie Gross tightens a part on the 1-3 ton main assembly
line. Company officials said they wanted to be prepared for
when the economy rebounded.
allows us to be the employer-of-choice in the area.
We don’t have to seek very hard to get applicants.”
White agrees. “When people say they work at
NMHG, people know this is a good spot to work,”
he said. “It’s somewhere that you want to be,
not somewhere that you have to be.”
Employee training gets a lift
In addition to refocusing its staffing approach, NMHG also
prepared for the economic recovery in other ways—including
the launch of eight new product lines. “We implemented a
manufacturing execution system (MES),” said Gardiner. “We
introduced new products. We have design changes coming
through on our products on a regular basis.”
One of the most significant ways NMHG drove its continuous
improvement during the downturn is training. “We recognized
that if our projections were going to come true, we needed to
change the way we train people,” said White.
NMHG increased training time from 10 hours to 80 hours
per person, which must be completed before performing
work in the plant. The new training program was already in
place when the company began rehiring. “The first people
to come back were previous employees,” White said. “Even
though they worked here before, they went back through
the training.”
In addition to basic employee job requirements, the training
emphasizes safety, quality, delivery, cost, morale, and environment. “We ensure that all production employees are capable of
performing their assigned jobs,” said Rodney Wilson, engineering services manager at NMHG. “We start the training with a
qualified peer and then have their work reviewed by a certified
trainer from the human resources department.”
NMHG has its own skilled welders on site. “When people say they work at
NMHG, people know this is a good spot to work,” said Tim White, plant manager
at NMHG’s Berea, Ky., plant.
“We had people who would volunteer to go to second
shift to help train new people coming in,” Gardiner
said. “We have changed a lot, and we had to bring
those people back up to speed. There were a lot of
positives. People who left and came back saw the
improvements.”
Training provides job-satisfaction benefits as well.
Darnell Hill, one of NMHG’s trainers, has worked at
the Berea plant for 34 years. The aspect that Hill likes
most about his job is: “I get to interact with people while we
are training. I get to learn their views on training and learning.”
Lowering environmental impact lowers energy costs
NMHG developed an energy committee to discover ways to
lower the company’s environmental footprint. As manufacturing
engineering services manager, Wilson leads the energy committee, which is comprised of leadership members from all of the
company’s North American locations, making the team both
local and divisional.
The energy committee’s target when it launched in October
2008 was to reduce the company’s utility usage (electric, water,
natural gas, and landfill) by 10% year over year. NMHG exceeded
its initial goal by reducing its utility usage 12.2% in 2009. But it
didn’t stop there. In 2010, NMHG beat its 5% target by reducing
usage 8.5%. And in 2011, the company is well above the 5%
target with an 11% reduction so far.
NMHG discovered that while reducing its environmental
impact, the company also reduced its energy costs. “When the
energy committee started the audit program, we targeted some
of the low-hanging fruit,” said Wilson. “We looked at simple
ways to reduce energy usage such as turning off lights, monitors,
fans, welding machines, and other types of equipment that could
be turned off when not in use.”
Depending on the specific industry, air compressors can account
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December 2011 • 5
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Workers in the paint area see a lot of the iconic yellow paint of the
Hyster and Yale lift trucks manufactured at NMHG.
Ralph Arvin works on the hood assembly at NMHG. Beyond its
hiring and training success, NMHG also has made energy and
environmental issues a core competency at the plant.
for most of a manufacturing facility’s electricity usage.
NMHG shuts down its nonessential air compressors during off shifts and weekends as part of its energy reduction
program.
Lighting is another area where energy use can be
reduced. NMHG reduced office and conference room
lighting by 50% and parking area lighting by 75% in 2009. “For
each fixture that had four fluorescent lamps, we reduced the number to two,” Wilson said. “We actually disconnected fixtures in
some of the office areas. We reduced the number of light fixtures
per pole from four to one in our parking lot, while maintaining
adequate lighting levels.”
The Berea plant installed motion sensors to control
the lighting in offices, conference rooms, and restrooms.
“This year, we launched a program to replace around 1,100
metal-halide lighting fixtures with T8 fluorescent fixtures and
lamps,” said Wilson. “We have at least a 20% increase in lumen
output in areas where we replaced the metal halides with fluorescent T8s. From day one, metal halide lamps start to degrade.
Around three or four weeks into a brand new metal halide, there’s
probably 15% to 20% reduction in output.”
This year, the Berea plant worked with the Madison County
Industrial Board to host an energy summit. School systems,
banks, hospitals, and other local peers attended the summit to
hear how NMHG reduced its energy usage and environmental
impact by taking some very small actions.
Wilson said the energy summit was very successful. “We
were able to work with some of our local peers who had gone
6 • December 2011
plant engineering
through both failures and successes. In fact, the lighting that
we’re changing out now is a result of the summit.”
The Berea plant has made other significant achievements in
reducing its environmental footprint, including:
n Standardizing and monitoring office temperatures at
68 F during the winter and 74 F during the summer
n Working with its electrical energy provider to develop a better
understanding of peak electricity usage in order to appropriately
schedule load shedding
n Implementing a recycling program across
the division.
Recyclables are collected on-site and transferred daily from point-of-use containers to a
bulk storage hopper for periodic transfer to a
recycling center. Recycled materials include:
n Sheet plastic
n Steel
n Cardboard
n Wood
n Aluminum cans
n Glass bottles
n Plastic containers
n Office paper.
Neighborhoods resolve issues, problems
The Berea plant created what it calls the neighborhood process
in response to a corporate quality survey that indicated opportunities for better communication and engagement. “We wanted to
increase the engagement on the shop floor,” White said. “There
are hundreds of great ideas out there.”
“We communicated the results of the survey and talked about
the items they addressed,” said Lawson. “We held focus groups
on how to address problems. People saw the need for change
and created a process and set of tools by which they can communicate issues, concerns, and challenges. The focus groups
were very positive; the result of those meetings became the
neighborhood process.”
The neighborhood process—a first for NMHG—provides
the opportunity for team members to meet with their support
teams each week in a supervisor-led meeting. Each department
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Neil Simpson marries the frame of a lift truck to the drive
train. A culture of continuous improvement has been a
hallmark of the efforts in Berea.
or major functional area is a neighborhood.
Through the neighborhood process, each team
member has the opportunity to be heard and receive
information about plant operations. Teams identify improvement areas, create action plans, and
determine when items must be completed. The top eight issues
are prioritized and tracked.
The neighborhood process has proven to be a valuable asset for the Berea plant as well as for all of NMHG.
Lawson said the plant has implemented around 1,100
items. Nearly 700 of them relate to safety and quality,
according to White.
The neighborhood process is also good for employee morale.
Steve Goosey, an assembler at the Berea plant, has been with
NMHG only about a year. What he likes most about working
for the company is the way it cares about its people. “The
neighborhood process shows us that management is open to
employee ideas.”
Wilson said prioritization and accountability are other significant results of the neighborhood process. “We choose the first
eight things we want to work on. Everyone knows that’s what
we need to focus on first. We’re holding ourselves accountable
to knock those things off the board.”
White said the only person who can take something off the
board or consider it closed is the person who put it on.
The underlying glue that holds this process together is communication. White said people can bring up issues and will get
feedback and status on them. “Team members know that if
issues are brought up using the neighborhood process, they will
be taken seriously. It has streamlined our communication as well as the work and support functions.”
“Knowing where an issue is in the process is
half the battle,” said Lawson. “This keeps people
engaged and believing in the process.”
Driving operations, continuous improvement
The Berea plant holds a kickoff meeting at the
start of every production day to develop plans and
identify potential challenges. Key performance indicators are
reported to evaluate first-hour performance and escalate potential
production issues.
Daily production is executed according to demand flow technology (DFT) manufacturing principles, which, according to
White, is the core of the Berea plant’s manufacturing system. With
DFT, customer demand drives manufacturing production scheduling and operations based on demand pull rather than forecasted
schedule push principles. DFT aligns business and customer
goals, and is simple, repeatable, effective, and customer-centric.
NMHG believes that DFT manufacturing principles and 5s
(sort, straighten, shine, standardize, sustain) provide the overall
support for waste elimination. “In my opinion, 5s is the bedrock
of any production system,” said White. “Where we have the most
traction is around 5s activities.”
Dan Campbell is a business analyst lead at the Berea plant.
Campbell developed E-Schedule, an electronic scheduling system
that generates production schedules, details product sequences,
maintains inventory integrity, and performs labor reporting at
key stages in the manufacturing process.
The E-Schedule system ties the manufacturing operations
together according to sequence. It improves operational efficiency
by eliminating manual work schedule creation and manipulation.
“It’s the interface to the external schedule,” said White. “It grabs
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December 2011 • 7
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customer orders from our AS-400 system, coordinates them
with the proper bills of materials, and determines the individual piece-parts we need to fabricate for the day’s schedule.”
E-Schedule isn’t the only e-manufacturing tool developed
at the Berea plant. Campbell also developed the in-house
MES, which is based on Windows SQL, .NET, and Visual
Basic. The MES tracks activities and resources, links administration to the shop floor, and integrates with other systems
in purchasing, shipping/receiving, inventory control, maintenance, and scheduling.
Because the MES is linked to E-Schedule, it triggers and
controls workflow by providing detailed unit-specific build
information to assembly operators.
Maintaining equipment, production uptime
Building lift trucks in Berea
NMHG manufactures both Hyster and Yale
lift trucks. Although there are similarities, each
brand offers different options and features that
accommodate different applications.
Because DFT enables one-piece workflow,
NMHG
can mix different models on the same
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line instead of making lift trucks in batches.
E-Schedule defines workflow by dividing incoming orders into
requirements for the various components manufactured at
the Berea plant. From there, the process of building lift trucks
begins.
Initial cutting and burning operations are done in a common fabrication area. Although this is a common area, it is
logically grouped according to families of parts.
These components are moved into the welding booths
where robots weld the major lift truck components such as
masts, overhead guards, and frames. Although robots perform
most of the welding, some manual welding tasks are required
as well.
Welded components and subassemblies are then painted. After painting, mast components go into the mast assembly area. The remaining painted components are placed on
the appropriate assembly line.
Lifting capacities determine lift truck sizes. NMHG categorizes these sizes into three ranges for assembly purposes.
Three separate lines handle lift truck assembly according to
these ranges.
“When the truck is put online, it triggers various feeder
cells and subassemblies,” White said. “Then we start assembling the truck. We prep the frame; put in the power train; and
put on the overhead guards, the seat, and the covers. We put
each lift truck through various quality checks and test a variety
of components. From here we apply the final decals, including
the last one that states ‘Made with pride in Berea, Kentucky.’”
The Berea plant performs preventive maintenance (PM)
to ensure production uptime. PM tasks not performed by the
end of the month are rolled into the next month and become
the highest priority. “Our goal is a 95% PM completion rate
each month,” said Wilson. “With the actions we’ve taken,
we’re continually in the 95% to 99% range.”
Equipment operators are empowered to deal with easily
resolved issues, allowing maintenance personnel to spend
more time on PM activities. This operator empowerment
came about as a result of the troubleshooting guides the
Berea plant developed for its major equipment. Troubleshooting guides are decision trees that outline common
issues, their causes, and suggested actions or solutions.
Anyone can generate work orders when issues arise that
require maintenance intervention. However, they are typically initiated by supervision via a web-based CMMS which
tracks the work orders and maintains PM schedules.
Uptime percentage is reported during the daily kickoff
meetings. Issues are tracked through the neighborhood meetings. Wilson said the troubleshooting guides have resulted
in more uptime because operators can react to situations
immediately instead of having to wait for a maintenance team.
Conclusion
When the economy finally began to recover, NMHG
was able to hire, rehire, and train employees. It reduced its
environmental impact and introduced new lift truck models.
Because the company used the downturn to prepare for the
rebound, the Berea plant is lifting its continuous improvement efforts even higher.
At NMHG’s Berea facility, continuous improvement is
driven at all levels of the organization. “We have to continue
to improve to be the best that we can be,” Gardiner said.
“Winning the Top Plant award is a mile marker along
the road, and the journey is long.”
Jack Smith is president of BIT Writing and Editing Services
and a former Plant Engineering editor.
Posted from Plant Engineering, December 2011. Copyright © CFE Media, Inc. All rights reserved.
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